One difference between perfect competition and monopolistic competition is that
a. in perfect competition, firms cannot earn a long-run economic profit
b. in perfect competition, firms take full advantage of economies of scale in long-run equilibrium; in monopolistic competition, firms do not
c. only under perfect competition is there ease of entry and exit
d. in monopolistic competition, the firm's demand curve is horizontal; in perfect competition, the firm's demand curve slopes downward
e. in perfect competition, there are many firms; under monopolistic competition, there are few firms
B
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How does the goods market return to equilibrium if AE is less than production?
What will be an ideal response?
The demand curve for the product of a monopolistically competitive firm slopes downward because
A) products are perceived by consumers as different. B) products are homogeneous. C) people only care about price when they buy a good. D) the firm's goal is to maximize profits.
Under which of the following circumstances might a gallon of water be more valuable than a flawless one carat diamond? a. At a diamond shop next door to a clean public drinking fountain
b. At a diamond shop next door to a typical grocery store selling bottled water. c. In any U.S. city with safe, clean drinking water. d. In a life raft with 8 passengers who have been adrift on a remote part of the Pacific Ocean for a week with few prospects of an immediate rescue.
If money demand decreases due to greater use of credit cards, which of the following would most likely happen under a neutralization policy?
a. The money supply would decrease, real GDP would not change, and neither would the interest rate. b. The money supply would increase, real GDP would not change, and neither would the interest rate. c. The money supply would decrease, real GDP would increase, and the interest rate would decrease. d. The money supply would increase, real GDP would not change, and the interest rate would decrease. e. The money supply would decrease, real GDP would decrease, but the interest rate would not change.